DES MOINES — Legislation requiring a “sunshine tax” for homeowners, farmers and businesses that generate solar power has moved to the full House Commerce Committee with the support of rate-regulated utilities and large business groups.
House Study Bill 185 would impose fees of about $300 a year on solar customers to cover the cost of using the electric grid. Under current net metering policies, a customer who owns private solar can “bank” excess energy and use it to offset their bill when their energy needs are greater than the energy they produce. Supporters of HSB 185 say this allows solar customers to benefit from the grid without paying for it.
Value of solar study
However, representatives from two Fairfield solar companies question whether this fee is fair. Troy Van Beek, CEO and co-founder of Ideal Energy, and Tyler Anderson, president of Simpleray, said the Iowa Legislature should not act on this bill until learning the value solar provides to the grid. As a matter of fact, the Iowa Utilities Board is studying how solar energy producers are compensated for generating excess electricity, but the study won’t be completed until next year.
Van Beek said solar customers produce benefits for the grid, because they generate energy when it’s needed most, on sunny days in the summer when air conditioners are running full blast.
Anderson and Van Beek said Minnesota completed a value of solar study a few years ago, the results of which reflected well on solar. Anderson said it showed solar customers were a net positive to the utility provider.
“We are confident that if such a study were completed here in Iowa, it would reveal the benefits to both the local energy grid and the local economy,” Anderson said.
Van Beek said Minnesota’s study prompted a gush of solar installations in that state.
“Minnesota has one of the more booming solar markets in the nation,” he said. “Solar does add value to the state. When the sun is shining, it’s not windy, and vice versa. Adding solar to our robust wind market helps balance the grid. We produce energy at its peak time when it’s most expensive, and sell it back to the grid. That’s not being accounted for in what [the bill’s proponents] are suggesting.”
Van Beek referred to HSB 185 as a “job killer” that could “destroy the solar industry.”
“Nearly 800 people are employed in the solar industry in Iowa, and those jobs will go away,” he said.
Simpleray employs 56 people. Ideal Energy employs about 30.
The Iowa Solar Energy Trade Association, which lobbies on behalf of solar companies, said the $300 annual fee would lengthen the average payback for solar arrays from 13 years to 24 years, “a blatant attempt to make solar uneconomical for farmers, business owners and residents.”
Former legislator and current Cedar Rapids City Council member Tyler Olson told the subcommittee, “If the life of system is 25 years — no one is going to make that investment.”
‘Matter of fairness’
However, the state’s largest utilities called the changes in the bill a matter of fairness.
“When a customer uses the grid but does not pay their share of those costs, all other customers bear that cost,” said Julie Vande Hoef of Alliant Energy, which supports the bill’s objective.
“It is important that we preserve a cost-of-service system so that all those that are taking advantage of the infrastructure system are paying for the usage of that system,” said J.D. Davis of MidAmerican Energy Company, which also supports the bill.
Derek Sadler of Shell Rock-based Current RE Solar, which installs renewable energy systems, estimated the solar electricity being talked about in the bill amounts to “tenths or hundredths of a percent” of Iowa’s total generation.
“If the idea is to kill private generation, this bill goes in that direction,” said former Speaker of the Iowa House Christopher Rants.
Rep. John Forbes, D-Des Moines, a member of the subcommittee who has 90 solar panels on his pharmacy, called for delaying action until the Legislature has the results of the utilities board study.
However, Commerce Committee Chairman Gary Carlson, R-Muscatine, said now is the time to make sure Iowa has the right infrastructure policy and to prevent solar power generators from pushing their costs onto low-income people and those on fixed incomes.
The Ledger reached out to local legislators to get their reaction to the bill. Rep. Joe Mitchell (R-Mt. Pleasant) serves on the Commerce Committee that considered this bill. Mitchell voted to advance the bill out of committee, but said he did that because he wants the whole caucus to discuss it.
“For now, I am leaning toward a no vote on the floor if it makes it that far,” he said. “I understand our district benefits greatly from solar and this bill does not help that. However, I am still looking at all sides of the issue and will make a decision at a later time.”
Rep. Jeff Shipley (R-Fairfield) worked for Simpleray (formerly Iowa Wind and Solar) from 2015-2018. He said he no longer has a financial relationship with the company, though he admires its contributions to the economy and bringing young families to southeast Iowa.
Shipley said he plans to vote against the bill.
When asked about its likely effect on the solar industry in Iowa, Shipley responded, “The bill would be a serious impediment to the residential solar market, but the bill would have less of an impact on the larger commercial and industrial projects that we’re seeing statewide.”
The Iowa Senate is considering a bill along the same lines, Senate Study Bill 1201. The Ledger sought comment from Sen. Mariannette Miller-Meeks (R-Ottumwa) and Sen. Rich Taylor (D-Mt. Pleasant) via email on Thursday, but had not received correspondence by today’s deadline.